Towards a sustainable link: an integrated framework for dispute resolution in the Islamic finance industry in Malaysia
As part of the transformation programme of the Malaysian government to make the country a sustainable global hub for Islamic finance, the necessary legal and regulatory frameworks need to be scaled up to meet the challenges of the time. While the regulatory authorities, such as Bank Negara Malaysia...
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| Format: | Conference or Workshop Item |
| Language: | English English |
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2014
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| Online Access: | http://irep.iium.edu.my/38302/ http://irep.iium.edu.my/38302/ http://irep.iium.edu.my/38302/11/20140919093201085.pdf http://irep.iium.edu.my/38302/13/Oseni_ASLI.pdf |
| Summary: | As part of the transformation programme of the Malaysian government to make the country a sustainable global hub for Islamic finance, the necessary legal and regulatory frameworks need to be scaled up to meet the challenges of the time. While the regulatory authorities, such as Bank Negara Malaysia, have constantly introduced unprecedented reforms that are worth emulating in other jurisdictions, the challenge of adequate access to justice still lingers on despite the current diverse options available to the parties in Islamic banking transactions. This paper explores the feasibility of creating a link across the existing frameworks for dispute resolution, including mediation and arbitration institutions with a view to providing easy access to consumers. Though the legal framework for Islamic finance in Malaysia has undergone series of reforms, the continued preference for litigation in Islamic finance contracts is not sustainable in the long run. Therefore, it is argued that since most Islamic financial institutions in Malaysia are more likely to use litigation for breaches of contract and defaults on the part of the customers, such attitude has relegated other sustainable processes of dispute resolution to the background and made them irrelevant in the Islamic finance industry. The findings of the research are expected to influence legal and regulatory reforms in the dispute resolution sector of the Islamic finance industry in Malaysia, particularly the new framework for financial ombudsman scheme introduced by the Islamic Financial Services Act 2013. |
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